Knowing how long to keep financial documents is essential to staying organize. The time to keep documents will vary depending on the purpose and the need. Some documents should be kept permanently while others will span anywhere from 3 – 7 years

A good rule of thumb when in doubt, keep the document longer if necessary. It is better to have too much than too little.

 Keep Permanently

Birth/Marriage /Divorce Record

Legal Documents and court papers

IRA’s. Mutual Funds, Stocks and Bonds Certificate of Deposit (CD)

Wills, trust, living wills and powers of attorney

Medical History: List of all medications, diagnosis, summaries of recent appointments.

Real estate: deeds and titles, birth/marriage/divorce records, passports

Trash after Three years to seven years

Use best judgment for these documents it is better to err on the path of too much. This list might adjusted to the individual needs.

Bank Statements, Credit Statements

Tax returns and supporting documents, such as W-2, donation records, 1099’s Business receipts etc.

Large appliance purchase, Warranties and service records (or until expires whichever comes first)

One month to one year

Utilities bills

Recurring monthly statements

Statements received quarterly

Store Receipts that will fade

Where to keep these documents

Securing financial document is very important, proper care must be put in place to ensure safety. Financial documents can either stored the old fashion way in a filing cabinet or electronic. Use a fireproof safe that can secure for permanent financial documents. Some financial document should not store electronic.

Whether a filing cabinet or computer used to store financial documents that will trashed after the selected period care should take when deposing of sensitive documents. Documents that has information such as Social Security, date of birth, account numbers especially should be shredded. Here is some helpful information to help you delete files containing financial documents from the computer. In the article “Permanently delete files from any device” it tells how to delete files from the computer.

When is the last time you had a financial checkup?

Getting a checkup is vital and important to any aspect of one’s life. Therefore, getting a financial checkup plays a very important part in one’s financial life. Getting a financial check will help to know where one stands financial. It will help to identify areas that has weakness which will allow one to plan effectively.

It’s becoming more and more prevalent to find individuals who have never done a financial checkup.  People avoid financial checkup for various reasons. Some of those reasons are:

1. Afraid of the result
2. Think it is costly
3. Avoiding the reality
4. Think they can manage on their own.
5. Financial literacy

Afraid of the result

Doing a financial checkup might reveal some chorionic financial diseases that is common today. Such the Cancer of Debt, the diabetes of no emergency savings or heart attach of filing bankruptcy.

Costly

Often time people are afraid of getting a financial checkup because they think it is costly. While getting a comprehensive financial plan done will have a cost attached to it there are simple and inexpensive way to get a financial checkup.

Avoidance

Some avoid the financial checkup because they are aware of their financial situation are afraid of what needs to be done to take care of their situation.

Financial Literacy

This is a topic that is rarely taught in schools. Most gets their financial education from parent or the school of hard knocks. While there are a several lessons to be learned from either. Seeking adequate knowledge to make productive financial decision is key. Even with the explosion of the internet people still find it difficult to get financial checkup.

If you have not had a financial check schedule one today or use this simple checkup sheet to see where you are.

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What is Cash Flow?

Cash flow is money moving (flowing) in and out of your household monthly. It seems money only flows out of the bank – but it does flow both ways.

Cash comes in from paycheck, interest, tax refund, gifts, business or hobby, side hustle, rental property, etc.

Cash flows out to bills or expenses (see the categories of expense explained in week 5), debt (creditors) and savings.

When cash flowing in exceeds cash flowing out then there is a positive cash flow and you can now save for emergency, retirement and investment.

If cash flowing out exceeds or is more than cash flowing in then one has to find a way to make up shortfall.

Keeping a record and recording how cash flows in and out of your household will help you to better manage your finances.

Here are some tips on how to watch you cash flow

1. Track your spending to see where your money is going
2. Track you income, where it comes from and how often
3. Watch cash flow weekly make note of how much cash you have at the begin of the week and note where that cash goes during the week
4. Look for spending pattern of cash.
5. Get a useful tool to help you watch your cash flow: , spreadsheet.
6. Align your cash flow with you budget.

Why Cash Flow is So Important

Lack of cash will cause increase debt and causes lack of financial security. Which leads to living from paycheck to paycheck. Inadequate cash will decrease savings.

Not watching will leads to overspending.

It will take the stress out of money management when you track cash flow.

Tracking cash flow will help to know when cash is available.

Cutting cost is essential to staying on track on the financial freedom journey to becoming financial fit.  These tips are not inclusive of all one can do to cut cost. However, implementing some of these tips will reduce expenses and help on the journey to financial fitness.

Brown bag lunch.

This tip while not new has been so much is that it works! If buying lunch at work costs $5, but making lunch at home costs only $2.50, then in a year, you could afford to create a $500 emergency fund and still have money left over.

Commit to eating out one fewer time each month.

Save money without sacrificing lifestyle by taking small steps to reduce dining out budget. Start off by eating out one (1) or two (2) times less per week.  As time progresses decrease dining out time slowly to suit the budget.

Plan meals in advance

Planning meals in advance and making grocery list will help in cutting cost on food. Planning meals will help to cut out overspending on grocery and waste. Using a grocery list will help with overspending and unnecessary buys.  The annual savings could easily be hundreds of dollars.

Shop by unit price.

Many grocery stores list a cost by unit of each item, such as the price by ounce or pound. Use these stickers when comparison shopping for the same product, just in a different size.

Stick to water.

It’s standard in the restaurant industry to mark up the cost of alcohol by three to five times. So, an easy way to cut down on your restaurant spending without changing your habits too drastically is to skip the drinks, alcoholic and nonalcoholic.

Save time and money by doubling the recipe.

When making the family favorite meal, double the recipe and freeze the leftovers for another day. That way two meals will be prepared which will allow efficient use of the ingredient with less waste. Aluminum pans of various sizes can be bought, especially when buying bulk, and make freezing and reheating a snap.

Categorizing the budget help with understanding where money goes, therefore giving the opportunity to redirect expenses.  In this challenge the ideal is to maximize saving by spending less.  Prioritizing expenses to take care of need is the ultimate goal. There are nine major categories of spending. Eight of these categories can be considered needs. The ninth one is a “don’t need”, but it is where some of your money is going.

The nine categories are:

GIVING

In your budget consider taking out your tithes and offering first before and put it aside. We are admonished to give 10% but you can decide in your heart the amount that you want to start with and work your way up to 10%. Like everything that is in your budget let it be realistic and manageable so you can do it consistently.

SAVING

is considered paying yourself first. Which means you put money aside before you pay your bills. Your goal is to be paying yourself at least 10% of what you earn.

SHELTER

is often the larges expense. The following expenses fall into this category: mortgage, rent, property taxes, electricity, water, gas, heating oil, maintenance, home phone, cell phone, cable or satellite, televisions, internet, and storage. There might be other items you might need to include in the category.

FOOD AND DRINK

includes your groceries, dining out, snacks, vending machine purchases and morning coffee rituals

CLOTHING

is an essential need. Some items to include in this category are shoes, laundry, dry cleaning, some accessories and alteration cost.

TRANSPORTATION

includes car payments or lease, gas, vehicle taxes, maintenance, parking, subway, bus pass, tolls and taxi fares.

INSURANCE

include your home or renter’s insurance, car insurance, health insurance, disability insurance, long-term care insurance and life insurance. Everyone might not need every type of insurance mention.

PERSONAL/MISCELLANEOUS

this category is combine of everything that does not fit in the seven category mention above. They are some of the items that will fall in this category: accessories for hear and beauty, alimony, child support, entertainment, medicine, pets, hobbies, gifts (birthday, graduation, Christmas etc.), movies magazines and vacations

DEBT AND CREDIT CARDS

paying on your debt or credit card is not a spending category because it is not a need. Include all debt other than mortgage and car loans in this category.